Challenging Assumptions: Race for HOLC Loans, 1933-1940

Price Fishback, University of Arizona
Jessica LaVoice, Bowdoin College
Thomas Storrs, University of Virginia
Randall Walsh, University of Pittsburgh

The Homeowners’ Loan Corporation (HOLC) refinanced about one million troubled home mortgages between 1933 and 1936 in the United States. In the 1940 Census of Housing, 4.5% of the outstanding HOLC mortgages on nonfarm owner-occupied one-family homes were on Black-owned properties. This rate is higher than any other type of mortgage. We illuminate a secondary market operating in newspaper classified ads where original HOLC borrowers offered their homes for sale such that buyers could assume said HOLC loan and offer general background on the life-cycle of HOLC loans between 1933 and 1940. We provide econometric evidence that Black movers were more likely to be homeowners in Census tracts with more HOLC loans, even after controlling for measures of initial black populations and black in-migration. The results are concentrated in areas graded D or red on the HOLC maps. We conclude 1) that a significant proportion of Black HOLC borrowers in 1940 were probably not the original HOLC borrowers and 2) that HOLC lending seems to have unintentionally enabled Black homeownership in the late 1930s US

No extended abstract or paper available

 Presented in Session 137. New Data on the New Deal